Barclays has lost a quintet of FIG bankers over the last month - and it shows how Jes Staley's bonus cuts may be affecting morale
- Barclays has lost five investment bankers from its Americas financial institutions group in the last month or so.
- The bankers left due to a variety of individual factors, though some included the British bank's efforts to cut compensation costs in order to meet a year-end profitability goal.
- Click here for more BI Prime stories.
Looks like Tim Throsby may have been right.
In March, the former Barclays exec sent an email to his ex-boss and Barclays CEO, Jes Staley, over what Throsby called wrongheaded plans to reach profitability goals by cutting pay across the investment bank. In an email he sent just days after being fired with the subject line "irreconcilable," Throsby said such plans to reach 9% return on equity goals this year would be destructive to morale and employee loyalty.
Behold the latest evidence: five managing directors in Barclays' Americas financial institutions group have given their notice within the last month or so, according to six people with knowledge of their plans.
The exits, including three execs who joined Barclays when it bought some parts of Lehman Brothers more than a decade ago, represents one of the biggest blows to the group that advises banks, asset managers and consumer finance companies since that time, according to one person's estimate.
The bankers who are leaving include Lee Einbinder, vice chairman and former head of the group, and Ted Conway, head of the banks and specialty finance franchise, the people said. Managing directors James Blanco, Justin Evans and Janis Vitols have also made their plans known, the people said.
Barclays and Staley have been upfront about their plans to cut compensation to help reach its profitability goal and stave off an activist investor who's called for shrinking the investment bank. Through the first half of the year, Barclays held firm to its plans, slashing the money set aside for bonuses in the first half by 23% from the prior year. The first half tally of 456 million pounds was the lowest since 2016.
A shrinking bonus pool was among the factors leading some of the bankers to leave, according to people with knowledge of their thinking. All of the bankers either declined to comment or didn't return messages seeking comment. A Barclays spokesman declined to comment.
The exits represent a splintering of a core FIG group that had been together since the Lehman days.
Conway joined Lehman Brothers in 1986, according to his LinkedIn profile, and joined Barclays when it purchased Lehman's US presence after the firm's 2008 bankruptcy. He was one of the bankers involved in the reorganization of mortgage lender DiTech earlier this year in a deal for which Barclays provided debtor-in-possession financing, one of the people said.
He will join Moelis as an MD focusing on specialty finance, mortgage origination and servicing, permanent capital vehicles and other special situations.
Einbinder joined Lehman in 1996 after stints at Credit Suisse First Boston and Salomon Brothers, according to industry records. A decade ago, he helped advise CME Group in its $8 billion purchase of Nymex Holdings and he led the Barclays FIG group until just a couple years ago. Most recently a vice chairman, he is leaving the business of investment banking, one of the people said.
Blanco, who began at Barclays in 2006, and later joined the combined Lehman-Barclays FIG group, will start at OneMain Financial as head of the corporate development function and an adviser to the management team on other strategic priorities, another person said. He was the lead banker for Apollo in its 2018 purchase of a minority stake in OneMain, where he got to know the management team, another person said.
Vitols, who joined Lehman in 2007, is joining Bank of America to run their asset management franchise within the financial institutions group, other people said. Reuters last month reported Vitols' move to Bank of America.
Evans, who worked at RBC Capital Markets before joining Barclays in 2015, was the British lender's liaison in a joint venture with the tech bankers known as the emerging fintech group. He's heading to Goldman Sachs as a West Coast-based managing director to cover banks as part of the firm's well publicized strategy to do more business with middle market clients, one of the people said.
The Barclays FIG group, run by Tom Vandever in the Americas and Tim Main globally, has no plans to replace the departing bankers, though a person with knowledge of the group's plans said promotions and recent hires may mean the group ends the year with the same number of managing directors as it began. The firm recently hired Daniel Zimbaldi from Evercore as an MD.
And Taylor Wright, a 25-year veteran of Morgan Stanley where he worked on equity raises for financial institition clients, joined the bank to co-head equity capital markets. He will co-run the business with Kristin DeClark, who joined recently from Deutsche Bank.